Vietnam, Laos oil pipeline gets the green light

Stakeholders in a joint venture to construct a bonded warehouse and oil pipeline running from Quang Binh central province’s Hon La island to Laos’ Khammouane province signed a cooperation agreement on April 25.

The four stakeholders in the venture include Laos Petro Joint Stock Company, Slovakian Energy Commodities, the Association of Vietnamese Investors in Laos (AVIL), and Truong Thinh group.

Speaking at the signing ceremony, Lao Finance Minister Liane Thykeo highlighted the significance of the project, saying it will help Laos ensure energy security and save oil and gas transport costs.

He pledged to create the best possible conditions to effectively implement the project and said he anticipates it will make a remarkable contribution to poverty reduction and economic growth in the nation.

“This is a practical activity nurturing and strengthening the time-honoured friendship, comprehensive cooperation and special solidarity between Laos and Vietnam,” he noted.

Vietnam seeks Japanese investment in stock market

The Vietnamese Ministry of Finance will work hard to improve the investment environment to raise the efficiency of projects and bring long-term benefits to Japanese investors in Vietnam.

Finance Minister Dinh Tien Dung made the commitment at a conference on promoting Japanese investment in Vietnam’s stock market, held in Tokyo on April 25.

Dung said the conference created a chance for Vietnamese agencies and businesses to learn from Japanese recommendations to finalise policies and create a sound, healthy and transparent investment environment.

Organising the conference shows Vietnam’s special commitment to Japanese investors, he told nearly 200 Japanese and Vietnamese enterprises and investors at the event.

With many Vietnamese businesses attending the event, the Vietnamese Ministry of Finance wants to help them to meet potential Japanese investors to support business restructuring, increase capital, and seek strategic investors, he said.

Through the conference, he said, Vietnam wants to introduce its policies on investment attraction into its stock market, finalise policies on foreign investment on the stock market, and promote partnerships between Vietnamese and Japanese investors.

Tetsuya Inoue, Head of the Technology and Market Research Department at the Nomura Research Institute, said the recent burgeoning of Vietnam’s economy and financial and stock markets has captured great attention from Japanese investors.

However, he said Japanese investors are keeping a close watch on these positive signs, as well as the government’s efforts in speeding up the restructuring of State-owned enterprises (SOEs) and making its monetary market healthier.

To attract Japanese investors, he suggested Vietnam provide sufficient information about its ongoing SOE equitisation, considering it the key to winning investor trust.

To date Japan is the largest foreign investor in Vietnam, having injected US$35.4 billion into this Southeast Asian economy to date. Japanese businesses are currently holding up to 40% of the total value of foreign investors’ shares on Vietnam’s stock market.

Vietnam’s economic recovery on track

The national economy has bottomed out since the third quarter of 2013 and is now on track to recovery, according to the National Financial Supervisory Commission (NFSC).

A NFSC report shows the economy has kept inflation at a low rate, stabilised the currency market, lowered deposit rates, and brought the dolarisation of the economy under control, thus consolidating investor trust.

Industrial production has begun to gain steam as material imports for production rose and inventory decreased.

The committee is optimistic about the country’s economic growth in 2014 thanks to improvements in aggregate demand, private investment, and exports.  

It forecasts the economy will grow by 5.8% and inflation will stay at 5%, without calculating fluctuations in the prices of food, essential products and public services.

However, it says the economy still faces a number of challenges, including slow improvements in aggregate demand, difficulties in agricultural production, and heavy reliance on the foreign direct investment (FDI) sector.

The NFSC affirms that the restructuring of credit organisations has obtained initial results, helping the banking system perform more stably. In addition, favourable economic policies have helped fuel aggregate demand and credit growth.

Vietnam finishes in top four of CFA Research Challenge

The CFA Institute of Singapore, an academic leader in financial and investment management, has cited Vietnam as one of the top four finalists in its Asia-Pacific Regional competition.

This is the third time the Vietnamese team has participated in the event, but only the first time the team has finished in the top four. The University of the Philippines at Diliman won first prize.

Rounding out the top four were the University of Foreign Trade (Vietnam), Auckland University of Technology (New Zealand), and Indian Institute of Foreign Trade.

Nguyen Ngoc Trang, a member of Vietnamese team was very pleased that the team clinched such a high finish at the contest thanks to tireless efforts.

The contest launched by the CFA Institute has provided students with factual knowledge on financial analysis and experiences from predecessors as well as improving their presentation skills, Trang said.

Ly Lam Duy, an expert from the University of Foreign Trade said that the event was a useful exercise for economic and financial students as it helps them learn more about CFA programmes and apply the knowledge in actual practice.

Duy expressed hope that a CFA Vietnam will be established in the future in order to support students nationwide with the opportunity to pursue post –graduate studies.

This year, 3,700 students from 825 universities around the world attended the regional competition which was ongoing from March 2013 to April 2014.

Ha Long trade and tourism fair opens

A trade fair kicked off in Ha Long city in the northern border province of Quang Ninh on April 25, attracting more than 350 local Vietnamese companies showcasing their wares in over 400 pavilions.

The week-long event, part of the annual Ha Long Carnival aims to promote the regions tourism appeal, aiming to create opportunities for local businesses to advertise their products, study market trends, seek trade partners and entice investment in the region.

This year’s event features a wide array of high-quality Made-in-Vietnam products and services such as garment and textiles, machinery, electronics, farm produce, processed food products, home appliances, interior furniture, handicrafts, and high-tech products.

Many tour and travel agencies take advantage of the occasion to introduce a variety of the more popular tourism packages, with a focus on touting the region’s fine resorts, entertainment, shopping, and cuisine.

Da Nang rice seed project gains initial success

A project converting Hoa Tien commune in the central city of Da Nang into a rice seed production hub has reaped positive outcomes, it was declared in a conference examining the project’s performance on April 25.

The project has been carried out by the municipal People’s Committee and the Food and Agriculture Organisation of the United Nations (FAO) since November 2011.

It is funded with some US$500,000 by the India-Brazil-South Africa Dialogue Forum Fund.

In three crops, it has tested 10 new rice varieties over nearly nine hectares, before selecting four which will be cultivated on a larger scale.

After each crop, the Agricultural Science Institute for the Southern Central Coast of Vietnam and the project managing unit instructed farmers how to grow new varieties, the conference heard.

FAO representative Jong Ha Bea said the project aims to raise rice producing and processing capacity in order to increase value.

In the next six months, FAO will help Hoa Tien extend the cultivation area so as to soon build a brand name for the rice hailing from the commune, he noted.

Meanwhile, in the short term, the project will work with the Department of Crop Cultivation, FAO and other relevant sides to complete a rice laboratory in Hoa Tien.

US – major importer of Vietnamese Tra fish

The US leads in importing Vietnamese Tra (Pangasius) fish, accounting for 21.4% of total market share, according to Vietnam Customs.

Vietnamese Tra fish exports to the US surged by 17.4% to US$73.1 million between January 1 and March 15.

In late March, the US Department of Commerce announced its final determination on the imposition of anti-dumping tariffs on Vietnamese Tra fish imported into the US from July 31, 2011 to August 1, 2012.

In accordance with the decision, some Vietnamese businesses enjoyed relatively low import duties, meaning Vietnamese Tra fish exports will most likely resume back to normal in the near future.

Also in March, the Vietnam Association of Seafood Exporters and Producers (VASEP) along with a representative delegation of seafood processors attended a North America Seafood Fair 2014 in Boston, Massachusetts.

Delegates learned that the US’s Tra fish reserves are likely to decline late this year which may fuel local demands.

The average price of Tra fish exported to the US in the first two months of this year was US$2.93 per kilo, down 2% against the same period last year.

Meanwhile, according to Progressive Grocer Magazine, the US seafood consumption market is forecast to be positive for the remainder of 2014 this year, coming on the heels of last year’s most successful year ever, in both volume and value.

Leading US experts and market analysts are optimistic that turnover from the retail seafood sector will keep rising this year.

FDI reaches nearly US$5 bln in four months

Vietnam has attracted US$4.855 billion in foreign direct investment (FDI) in the first four months of the year, equal to 59% of the amount a year ago, official statistics show.

About 530 FDI projects have been licensed in the reviewed period, including 390 new ones capitalized at US$3.22 billion, according to the Foreign Investment Agency under the Ministry of Planning and Investment.

The manufacturing and processing sector led in attracting foreign investment with 204 new projects at US$3.6 billion, accounting for 74.3% of the total.

Real estate ranked second with 7 projects at US$392.3 million, making up 8.1%, followed by construction with US$237 million (making up 4.9%) and health care and social support (US$225.93 million).

The Republic of Korea was the largest foreign investor, pouring in US$1.12 billion; Japan came in second with US$531 million, and Singapore ranked third with US$479.18 million.

At present, Binh Duong topped the localities in FDI attraction, followed by Ho Chi Minh City, Dong Nai, Quang Ninh, Tay Ninh and Hai Duong.

About US$4 billion in FDI has been disbursed in the four month period, a year-on-year increase of 6.7%, said the Foreign Investment Agency.

Businesses tipped to penetrate EU market

Vietnamese businesses are advised to carefully study the EU’s demand and distribution network to adopt an appropriate access approach, a seminar in Ho Chi Minh City on April 25 heard.

The EU has always been an important trade partner of Vietnam, with two-way trade continuing to expand in recent years, despite the global economic downturn.  In 2012, the EU surpassed the US to become Vietnam’s largest export market.

Total two-way turnover reached over US$33.7 billion in 2013, a year-on-year increase of 16%. Of the total, Vietnam exported US$24.3 billion to the EU, up 19% compared to the prior year.

However, Vietnamese goods exported to the EU are overly dependent on foreign businesses operating in Vietnam, according to Nguyen Duc Thuong, Deputy Director of the Europe Market Department under the Ministry of Industry and Trade.

The capacity of Vietnam’s domestic businesses to fully penetrate the EU market is much too limited and hampered by a number of factors, focusing too much on price competition.

The business community needs to study and learn the distribution process utilised by the EU in order to effectively compete on an equal footing, delivering higher quality and higher added value products as an alternative strategy to strictly price competition.  

This will dramatically increase the number of domestic companies actively participating in the export marketplace, bolstering Vietnam’s economy fully benefitting all the people of the nation.

This is particularly important in the context of ongoing negotiations for a bilateral Free Trade Agreement (FTA) which are expected to conclude later this year, Thuong concluded.

At the seminar, delegates delved into effective distribution systems, procedures, EU import regulations, and EU market demand and lively discussions regarding the advantages and disadvantages to Vietnamese business.

The event was co-organized by the Department of Europe Market under the Ministry of Industry and Trade and European Trade Policy and Investment Support Project (EU-MUTRAP).

EPZs, IPs face labour shortage

Labour shortage is one of the headaches faced by companies in industrial parks (IPs) and export-processing zones (EPZs) in Ho Chi Minh City, a local newspaper has reported.

Labour demand in the city’s IPs and EPZs rose slightly in the first quarter of this year, especially for unskilled labourers, which is attributable to a number of workers having quit jobs in the year to date and operational enterprises’ strong need for production expansion, said the Saigon Times Daily.

The demand at local enterprises in EPZs and IPs was estimated at about 17,130 workers in the first quarter, particularly in textile-garment and footwear-leather industries.

Meanwhile, the job placement and corporate assistance centre of Hepza could only introduce 1,480 candidates to these employers but only 450 of them met employers’ recruitment requirements.

Despite the rising employment demand, the city has seen a labour undersupply in EPZs and IPs. To deal with the situation, the Hepza centre has worked with the Voice of HCM City (VOH) to air information about recruitments by enterprises at IPs and EPZs in the city in the latter’s radio programmes.

Besides, to ensure a sustainable labour supply, the centre has also joined forces with vocational schools and other localities to organise training courses for workers.

For instance, the centre and the Military Region 9 Vocational School in the Mekong Delta province of Vinh Long have jointly supplied skilled workers for EPZs and IPs in HCM City.

Also, the centre has counselled job seeking skills or organised job fairs for students from Ton Duc Thang University and HCM City Economics and Technology College among others.

Currently, there are around 1,290 investment projects in local EPZs and IPs with total registered capital of over 8 billion USD. The current number of employees at these IPs and EPZs are roughly 269,800, dropping by more than 4,200 compared to the same period in 2013.

Local shipping firms effectively tap domestic routes

Local shipping firms have effectively tapped domestic market, the Vietnam Investment Review (VIR) reported on April 16. In an effort to address the redundancy of Vietnamese container ships, in late March 2013 the Ministry of Transport (MoT) released Document 128/TB-BGTVT to stop 20 foreign flag-carrying ships capable of carrying 500,000 dead weight tonnage (DWT) from operating on domestic routes.

The policy was very helpful to local shipping firms.

They had a good chance to regain market share of shipping lines that have an estimated value of 1 trillion VND (47 million USD) per year.

“It’s difficult for foreign ship owners to go against the decision, as it is defended by both the Maritime Law and WTO commitments on safeguarding the transportation rights of member states,” said Bui Thien Thu, Deputy Chairman of the Vietnam Maritime Administration (VMA).

Thu said most ship owners were satisfied with the competence and quality of transport services provided by local shipping firms in domestic shipping lanes.

The policy came at a critical time as 2,200 labourers from Vinalines – a national shipping leader – sat unemployed for the first six months of last year.

“Most of Vinalines’ container ships are now working stably in domestic shipping lanes,” said Bui Viet Hoai, the company’s deputy general director.

The VMA was required by the MoT to work with Vinalines, the Vietnam Shipowners’ Association and local ship owners to ensure goods were shipped quickly.

The shipping cost for a 20-foot container on Vietnam ’s north-south line is around 5.2 million VND (247 USD).

According to Le Viet Tien, director of Vinalines’ subsidiary Vietnam Ocean Shipping Joint Stock Company (VOSCO), though the firm was only achieving break-even on its expenses, they accepted this given that their ships and sailors were back to work.

Not only Vinalines, but also other shipping firms are running local routes such as Haiphong and Cai Lan to Ho Chi Minh City and Ba Ria-Vung Tau.

This has been a good chance for shipping firms to prove to ship owners that they can effectively operate the domestic [container shipping] market without foreign players,” said Vinalines’ deputy general director Bui Viet Hoai.

Thai Nguyen sees strong foreign investment growth

The foreign-invested sector has highlighted the northern Thai Nguyen province's upbeat economic picture in the first quarter of 2014, according to the municipal Department of Planning and Investment.

As per statistics revealed by the department, the province had attracted US$205.6 million in foreign direct investment (FDI) from 15 newly licensed projects and 4 operating ones, thereby raising their levels of capital investment in the January-March period. This had resulted in the province ranking fifth in the country's leading localities in terms of FDI investment.

During the reviewed period, disbursement of FDI had reached over US$174 million, 81 times higher than the figure noted in the same period last year, it claimed.

The strong growth in the period's FDI disbursement was attributable to greater efforts by the local authorities in speeding up land clearance and simplifying administrative procedures as a move to create favourable conditions for foreign investors, Dang Xuan Truong, the department director informed Viet Nam Economic News.

Truong also forecast that the FDI disbursement will continue to increase and is estimated to top between US$800 million and US$1 billion by the year-end.

Last year, Thai Nguyen led localities in FDI investment, raking in about US$3.3 billion and constituting 16.1 per cent of the country's total figure of US$21.6 billion.

Apart from successfully attracting the largest FDI investment last year, the province was also an ideal destination for Samsung Group's three investment projects.

To succeed in attracting FDI, Thai Nguyen took various steps to improve its investment environment with eight major solutions related to laws and policies, planning, infrastructure, human resources, site clearance, administrative reform, and investment promotion, elaborated the provincial People's Committee Chairman Duong Ngoc Long.

Thanks to the implementation of a series of Provincial Competitiveness Index (PCI) improvement measures, Thai Nguyen has enhanced the investment environment remarkably, climbing up from 57th position among the 63 provinces and cities across the country in PCI terms in 2011 to 44th in 2012 and 17th in 2013.

VAMA proposes using int’l fuel consumption results

The Vietnam Auto Manufacturers Association (VAMA) has proposed Vietnamese authorities accept the fuel consumption test results that are internationally recognized when vehicles are required to display a fuel consumption label next year.

Metelo Jesus Arias, general director of Ford Vietnam and chairman of VAMA, told the Daily that he was behind the Ministry of Transport plan that compels vehicles to display a fuel consumption label.

He, however, said there should be a workable road map and guidelines from authorities on how to implement the new requirement, test standards, label templates and a label display location. Besides, procedures for certifying a car’s fuel consumption should be kept simple.

According to VAMA, the authorities should recognize internationally approved test results of fuel consumption conducted by automakers and importers.

Some countries have fuel consumption labeling rules in place, which are designed to classify vehicles and display information about fuel consumption, emissions, or amounts of money saved in five years.

Under the Ministry of Transport’s new circular, with effect from next year, passenger vehicles of less than seven seats, which are domestically manufactured/assembled and imported, will have to display fuel consumption labels.

As planned by Vietnam Register, the fuel consumption label would be put on the front windscreen, containing information about automaker, assembler, importer, and fuel consumption.

Domestically manufactured/assembled cars certified to meet technical safety and environment requirements by next year will have to display the label as from 2016.

Leading European retailer likely to open store at I-Home building

C.T Group has said it has worked with a major European retail firm over a plan to open a commercial center on the ground floor of I-Home apartment project under construction in HCMC’s Go Vap District.

The foreign retailer has come to the site of the apartment project for inspection and the forthcoming opening of the store would add value to the apartments, according to C.T Group.

I-Home is located on Pham Van Chieu Street and consists of three blocks with around 500 units of 47-76 square meters whose prices range from VND630 million to VND1.1 billion.

The first block has the first 11 floors complete at the moment while the third floors of the other two blocks have just been finished. Apartment buyers can take delivery by the end of this year.

FPT Software seeks 900 more engineers

FPT Software HCMC Co. Ltd said it has plans to recruit 900 software engineers this year as part of a strategy for expanding its business operations and boosting its work force to 5,000 people by 2018.

Vietnam’s leading software firm has had 1,500 employees by this month, 15 times higher than in 2004 when it started its software production business.

FPT Software HCMC posted last year’s revenue of more than US$21 million compared to US$1.4 million 10 years ago when the company was established. In the past decade, it has registered annual revenue growth of around 30%.

Nguyen Thanh Lam, general director of FPT Software HCMC, told the Daily that the firm now has more than 100 customers, including Japanese clients who always have high requirements for products.

According to the Ministry of Information and Communications, Vietnam became Japan’s second largest partner in terms of software outsourcing last year. Japanese businesses now tend to have their software outsourced overseas, offering a great opportunity for Vietnamese software producers.

On the local front, FPT Software HCMC has signed cooperation agreements with big enterprises operating in Vietnam such as Unilever, Suntory PepsiCo, Masan, Samsung and MobiFone. The company provides services related to satellite television and cloud computing for customers in Japan, North America and Europe.

FPT Software HCMC is the biggest Vietnamese investor in the Saigon High-Tech Park in HCMC’s District 9, with total investments of US$2.1 billion. Its F-Town 1 project in the zone, worth some VND170 billion, has been operational for two years, and F-Town 2 project is now under construction and is slated for completion late this year with investment capital of VND200 billion.

Retailers seek to attract buyers via installment plans

Struggling with sluggish sales, retailers are joining hands with producers of home appliances to roll out attractive installment plans with low interest rates to woo customers.

FPT Shop, The Gioi Di Dong (Mobile World) and Vien Thong A are among the retailers that are offering installment plans as a measure to improve their sales.

FPT Retail said three consumer credit providers ACS, Home Credit and FE Credit of Vietnam Prosperity Bank (VPBank) had joined forces to help customers pay by installment for the products they buy at FPT Shop store chain. The monthly interest rates this month are 1.49%-2.2% at ACS, 0.93%-4.13% at PPF and 1.51%-4.31% at FE Credit.

This month, the firm supports part of the interest rates for buyers of tablets, cellphones and laptops so they can enjoy a rate of 1.49% per month. FPT Retail said credit card holders of ANZ and Saigon Thuong Tin Commercial Bank (Sacombank) could benefit from an installment payment program with a zero interest rate at all FPT Shop outlets.

The Gioi Di Dong (Mobile World) and other retailers in Vietnam are also working with banks to boost their installment plans.

However, customers are advised to thoroughly examine terms and conditions of those installment plans on offer at retail shops as well as consumer loans as annual interest rates could amount to 51-60% in certain cases.

15 satellite cities to go up in SKEZ

Fifteen satellite cities will be developed between now and 2030 in the Southern Key Economic Zone (SKEZ) to create closer links between localities in this region, including HCMC, Binh Phuoc, Tay Ninh, Binh Duong, Dong Nai, Ba Ria-Vung Tau, Long An and Tien Giang.

The planned satellite cities will be Nhon Trach, Long Thanh, Tam Phuoc, Hiep Phuoc, Cu Chi, Duc Hoa, Trang Bom, An Lac, Nha Be, Can Gio, Di An-Thuan An, Tan An, Go Cong, Ben Luc and Can Giuoc, according to a master zoning plan on HCMC’s socio-economic development until 2020 with a vision towards 2025.

Approved by the Prime Minister last December, the plan is associated with another master zoning plan on socio-economic development for the SKEZ by 2020 with an orientation towards 2030 given the Prime Minister’s approval in February this year.

Under the master zoning plans, the SKEZ will be developed with different central districts in order to drive development of surrounding areas to ease pressure for the existing business center in HCMC.

Besides the 15 future satellite cities, the southern focal economic zone will have around 580 expressway kilometers and 80% of the roads in rural areas will be improved by 2020. At the same time, the north-south railway running to HCMC will be upgraded and connected to major seaports and economic zones.

The expressway sections in the southern focal economic zone will be HCMC-Long Thanh-Dau Giay, HCMC-Thu Dau 1-Chon Thanh, HCMC-Trung Luong, Bien Hoa-Vung Tau and Ben Luc-Nhon Trach-Long Thanh.

The zone is expected to be home to 21-22 million people with an urbanization rate of 65% by 2020. Its annual GDP growth is projected at 8-8.5% from 2011 to 2015 and some 8.5-9% in 2016-2020.

Domestic ships transport more cargo

The cargo volume transported by domestic ships has increased by 10-12% versus the period before April 1, 2013, when the Ministry of Transport stopped renewing container transport licenses and awarding new certificates to the ships which are not Vietnamese-flagged.

According to the Vietnam Maritime Administration, the domestic fleet operating on local routes had increased from 19 to 26 vessels as of April 1. Furthermore, some new routes had been in place, helping a number of enterprises reduce losses or make gains.

Experts, however, said that the performance of ships on domestic routes is still mired in hardship due to cargo imbalances between the north and the south.

Last year, the Haiphong-HCMC route saw scarce shipments with demand meeting just 50-60% of ships’ capacity while the ratio of the opposite route exceeded 90%.

Therefore, local vessels had to transport empty containers of foreign ships as a way to improve earnings.

Relevant agencies said there had not been goods backlogs at seaports since the prohibition took effect.

The domestic market had been dominated by foreign shipping firms before April 1, 2013, when the Ministry of Transport prohibited foreign ships from plying on domestic routes to help the Vietnamese fleet cope with difficulties.

Cars in Vietnam more expensive than in regional nations

Vietnamese consumers have to buy an automobile at a price nearly VND300 million higher than in regional markets, said the Industrial Policy and Strategy Institute under the Ministry of Industry and Trade.

In a report announced at a conference on mechanical engineering industry development in Hanoi City last week, the institute pointed out that auto prices are higher in Vietnam than those in Indonesia and Thailand by VND50-300 million a unit depending on car makes.

The institute blamed higher production costs and special consumption tax on cars under nine seats as the basic cause of the wide price difference.

At present, the auto industry is still protected by import tariffs from 15% to 60%. However, domestically assembled cars meet only 60-70% of the market demand with around 100,000 units available for sale a year.

The size of the local auto market is still small, only half of the Philippines, one-fifth of Malaysia and one-24th of Thailand two years ago.

Vietnam’s auto industry will have a gloomy outlook if the Government fails to issue appropriate policies right now, the institute urged.

In 2018, Vietnam will have to slash import taxes on completely-built-up (CBU) cars from ASEAN nations to 0%. Therefore, the nation has less than five years to prepare and raise competitiveness of the domestic auto industry.

If the Government fails to act, Vietnam will fall into the same plight of the Philippines a few years ago. At the time, Filipino assemblers rushed to import cars because of an underdeveloped industry and unclear policies, and as a result, the nation saw a serious trade deficit when auto demands soared and car imports rocketed.

Speaking at the conference, a representative of Truong Hai Auto Group said that automotive engineering should be considered a key industry. The Government should complete a master plan on auto sector development from now to 2020 with a vision until 2030.

Controversy has arisen over special consumption tax between authorized car importers and producers, with the former agreeing at the tariff calculation method while the latter have bemoaned disadvantages.

At least six importers have objected to a suggestion of the Vietnam Automobile Manufacturers’ Association (VAMA) for a change to calculation of the special consumption tax for CBU car imports to protect the local industry.

The enterprises in a petition sent to the Ministry of Industry and Trade recently said that the current tax calculation method is fair as it takes into account all relevant costs as a basis for the tariff.

Meanwhile, VAMA members, though completely-knocked-down (CKD) assemblers, have imported finished cars for domestic sale. So, they have found that the current tax calculation is unfair to domestic producers.

Given the current rule, CKD vehicles are subject to a tax calculation based on a wholesale price with sale cost included. Meanwhile, imported CBUs are subject to the Cost, Insurance and Freight (CIF) rule without sale cost.

Therefore, prices of vehicles are always higher than imported cars, the members said.

Fee collections for State budget still meager

Only a small part of fee collections has gone to State coffers although revenues from these sources remain huge after more than half of the fees have been abolished, the Ministry of Finance reports.

In a recent report submitted to the Government, the ministry informed that it and other ministries and localities had already removed over 340 types of fee as they went against the nation’s existing relevant regulations.

However, there are still around 301 fees effective, the ministry said.

The contribution of fees to the State budget has declined steadily over the years, from around VND42 trillion or 5.8% of the total State budget revenues in 2011 to some VND29.1 trillion, or 3.9%, in 2012 and roughly VND31.3 trillion, or 3.8%, last year.

In fact, the contribution of fee collections to the State budget has been much lower than the amount collected in reality.

According to the finance ministry, administration agencies are allowed to retain 60% of total fee collections and the remainder goes to State coffers, while other agencies can keep up to 90% and transfer the rest to the State.

A number of experts and deputies of the National Assembly (NA) have complained fee collections in Vietnam are still high and that many fees still overlapped.

A recent report by the International Monetary Fund indicates that the ratio of fees and taxes to GDP in Vietnam is 1.2-1.8 times higher than in other Asian nations.

The NA’s Economic Committee confirmed the high fee collection ratio, citing the results of a recent survey that Vietnam’s fee and tax revenues exclusive of crude oil-related ones had accounted for 26.2% of the country’s GDP every year in the past five years.

Meanwhile, the respective figures in China, Cambodia, Thailand, the Philippines and Indonesia were 19.6%, 14.8%, 21.4%, 15.3% and 18.9%.

US purchases 22% of Vietnam’s fishery shipments

According to the Import and Export Department of the Ministry of Trade and Industry, the US is currently the largest market for Vietnam’s seafood exports, accounting for 22% of total seafood shipments.

Seafood exports to the US returned US$1.5 billion in 2013, a 27.4% rise over 2012, and US$155.6 million in January, an 87.8% year-on-year increase.

The US has been a leading importer of shrimp, pangasius, tuna and crab from Vietnam, which accounted for 95.7% of the country’s total seafood export value to the US market last year, including 54.7% shrimp, 25% pangasius, 12.3% tuna and 3.5% crab.

Though most of the country’s exports have fallen in the initial months of this year, positive signals have still been seen in the US market as shrimp and pangasius exports to the US increased by 163% and 44.6% respectively so far.

The sharp increase in shrimp exports to the US market resulted from the stability of the local shrimp supply and a win by domestic shrimp processors in the US anti-dumping and anti-subsidy case.

Projects behind schedule do not receive capital

Capital will be transferred from projects behind schedule to projects on-schedule, according to the Ministry of Construction on April 15.

This is part of Minister of Construction Trinh Dinh Dung’s Decision 232 to decrease construction waste.

Relevant agencies will closely control budget on construction projects financed by the State Budget. Establishment, appraisals, and approval projects will be conducted in accordance to socioeconomic development and construction.

Agencies must have a prepared list of projects in order to receive state funding. Projects finishing before 2015 will receive priority.

Projects without approval will not receive permission to commence.

Marketing steps up game to encourage use of E5 gasoline

Sales manager of Saigon Petro Company Tran Minh Ha believes that marketing needs to be boosted about the E5 gasoline with ethanol to encourage consumption.

Price for a liter of the E5 is the same as A92 gasoline, said Ha.

Vietnam National Oil and Gas Group (PVN) fears that customers will hesitate to fill gasoline E5 because they do not understand the benefits of it.

Relevant agencies should market to consumers about gasoline E5 before it becomes available in Quang Ngai, Ha Noi, Hai Phong, Da Nang, Ba Ria-Vung Tau, HCMC and Can Tho from December 1, said Nguyen Xuan Thuy, director of the Department of Industry and Trade in Quang Ngai Province.

The blend will be used nationwide starting Dec. 1, 2015.

Quang Ngai Province, the pioneer for the distribution of the blend, will supply the stations with the fuel starting June 1.

The country has seven ethanol production plants generating 535 million liters per year, according to the Ministry of Industry and Trade. This is enough to create blends of E5 and E10 gasoline in 2014.

The plants are able to produce 8.35 million tons of gasoline E5 or 4.17 million tons of gasoline E10 at full operation. This is sufficient for nationwide consumption.

Additional plants are under construction to produce more ethanol.

Petrol Vietnam provided only 22,000 cubic meters of gasoline E5 in the market in the last few years. This number is accounted for only 1.1 percent of an ethanol plant capacity.

Three out of 10 petrol wholesale companies have so far sold the blend at 170 out 12,000 stations in the country. Stations with the blend include PV Oil, Petec, and Saigon Petro.

Consumption of the blend is not as popular as expected in 2007 when it was released into the market.

State-owned businesses called for forging bond

Chairman of the Ho Chi Minh City People’s Committee Le Hoang Quan has urged enterprises, especially those wholly owned by the State, to strengthen links for mutual development.

At an April 17 meeting with representatives from departments, agencies and State-owned businesses in the locality, the mayor suggested enterprises focus on human resources development, particularly high-qualified staff.

As banks are reducing lending rates, business players should have specific plans to access loans for investment in equipment and technology, he noted.

Local firms were also asked to work together for both extensive and intensive restructuring and stay proactive to cope with more severe competition.

According to the municipal Finance Department, Ho Chi Minh City is home to 108 State-owned companies, 15 of which are making procedures for merger, acquisition dissolving and bankruptcy.

In the first quarter of this year, these enterprises raked in 15.6 trillion VND (733 million USD) in total revenue, down 18.73 percent against the same period last year.

MASkargo expands cargo network to Hanoi

MASkargo, the air cargo division of Malaysia Airlines, marked another historic milestone by launching its first Airbus A330-200 freight flight to Hanoi last week.

MASkargo already operates its successful Kuala Lumpur, Ho Chi Minh City, Bangkok, Kuala Lumpur circuit.

The A330-200 freighter is scheduled to fly into Noi Bai International Airport from Kuala Lumpur every Wednesday and Friday.

The twice-weekly flight will operate along a Kuala Lumpur, Singapore, Labuan, Hanoi, Kuala Lumpur circuit.

"We want to develop in the Vietnamese market by facilitating cargo links between Vietnam and its trading partners. With GDP growth of 5.42 per cent in 2013, we see huge potential to promote our business in Vietnam," said Mohd Yunus Idris, chief executive officer of MASkargo.

He said Hanoi was a vibrant export hub for electronic parts and equipment as well as garments and footwear. MASkargo was confident that the route serving the Vietnamese capital would prove lucrative as had access to global destinations across Asia, Europe, India, Japan and the Middle East.

The presence of international manufacturers and the country's air freight potential has spurred demands for fast and reliable air cargo movement.

MASkargo's General Sales Agents - Aviation Solutions Services Co. Ltd expects a positive initial response to the dedicated freight carrier, with Vietnam's economic growth likely to pave the way for increased daily services in the near future.

In addition, MASkargo also operates weekly freight services into Ho Chi Minh City. Malaysia Airlines (MAS) also runs a seven flights a week commercial route via Kuala Lumpur and Hanoi.

The Airbus A330-200 allows the fledging MASkargo freight service to build capacity and expand its network in the Asia region.

Standard Chartered Bank appoints CEO for ASEAN markets

Standard Chartered Bank today announced the appointment of Lim Cheng Teck as the chief executive officer (CEO) for its ASEAN markets. The appointment is effective from May 1, 2014.

To maximise opportunities in key growth regions, the bank has recently implemented a new structure of eight specific regions: ASEAN, Greater China, North East Asia, MENAP, South Asia, Africa, Europe and the Americas.

As CEO ASEAN, Cheng Teck will be responsible for delivering the refreshed and sharpened strategy to realise the growth and return aspirations for the bank’s franchise and operations in ASEAN, comprising Singapore, Indonesia, Malaysia, Thailand, Philippines, Laos, Myanmar, Vietnam, Cambodia, Brunei and Australia.

Cheng Teck is a veteran banker with 26 years of experience in Standard Chartered.

Prior to this new role, Cheng Teck was CEO and executive vice chairman of Standard Chartered Bank (China) Limited.

He led the China team to double revenue from 2009 to 2012, crossing $1 billion for the first time and doubled its branch footprint in China.

Before China, Cheng Teck was CEO of Standard Chartered Bank, Singapore.

Jaspal Bindra, group executive director and CEO Asia, Standard Chartered PLC said: “We are pleased to announce the appointment of Cheng Teck as CEO of ASEAN where we are the only international bank to be present in all ten markets. It is an important region, contributing close to a quarter of the group’s total income in 2013. We are confident of ASEAN’s growth potential and with Cheng Teck’s appointment, our aim is to more effectively contribute to and grow with the region.”

“Cheng Teck’s excellent track record as CEO in high growth, high potential markets such as Singapore and China, will be a boost to our long term growth aspirations in this region. He will lead our strategic efforts to leverage on our strong ASEAN presence to facilitate trade and investment flows between ASEAN and the rest of the world, and to enhance the support we provide to all our clients,” he added.

“ASEAN has immense opportunities, with its 600 million strong population and steady economic growth; it has significant potential for the financial services industry. I look forward to leading this exciting franchise and drawing on the expertise of our 30,000 staff to provide innovative client-centric solutions," said Lim Cheng Teck, CEO for Standard Chartered Bank, ASEAN.

Cheng Teck was chairman of Standard Chartered (Mauritius) Limited from 2008 to 2010 and has been a non-executive director of Standard Chartered (Taiwan) Ltd. since July 2010.

A master of Business Administration graduate from Brunel University, United Kingdom, Cheng Teck read his first degree (Bachelor of Arts) at the National University of Singapore.

An arts enthusiast, Cheng Teck also enjoys travelling, music and playing the occasional round of golf.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR